TL; DR
Full story
Bitcoin, Ethereum, and Solana have all lost insane amounts of value in the past week.
Why? Please be patient while we cook…
Imagine if an airplane were to be delayed by five minutes due to any steering adjustments made by the pilot…
(It would be Flying Spirit, or any Boeing aircraft, That much scarier).
Oddly enough, that’s how the Federal Reserve controls the US economy with interest rate adjustments.
Every time they adjust the interest rate it takes – wait for it…
Eighteen whole months to make the effects visible in the economy.
That means that when economic data starts sending warning signals, it’s often too late and the Fed can’t adapt quickly enough to stem any bleeding.
Over the past year, the Fed has tried to thread a needle that looks like this:
Weaken the economy enough so that we don’t end up in hyperinflation… and at the same time avoid a recession (i.e. ensure a ‘soft landing’).
That’s like trying to fillet a fish with a hammer.
About a month ago we started seeing signs that the economy was weakening, albeit only slightly – which is good if we want a soft landing.
…but over the past week we have seen signs that this economic slowdown is accelerating, with data showing wages falling while unemployment rose much faster than expected.
With that fear came a debilitating market sell-off.
BTC fell from ~$70k to ~$57.1k, ETH fell from ~$3.4k to ~$2.6k, and Solana fell in value from ~$193 to ~$130.
Okay, now you know.